“Making Korea a Better Place to Do Business”
Amy Jackson is the president of the American Chamber of Commerce in Korea. Amy is leading efforts to promote the interests of foreign companies in Korea.
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Tom:Hello, and thanks for joining us today at KoreaBusinessCentral.com. My name is Tom Tucker. I’m the host for our ongoing interview series with movers and shakers when it comes to all things pertaining to business in Korea.
My guest today is Amy Jackson. She is the President of the American Chamber of Commerce in Korea where she has lived for seven years. Previously, she worked for the Office of the US Trade Representative and was the Deputy Assistant US Trade Representative for Korea.
She also previously accumulated 15 years of experience working with the United States government at NASA where she negotiated space deals with Japan and, overall, she’s been working with Korea since 2002.
Amy, great to have you. Thanks for joining us today.
Amy:Yeah, thank you. It’s a pleasure.
Tom:Just real quickly, tell us what is the American Chamber of Commerce in Korea? Tell us about it. What is it and what do you do?
Amy:The American Chamber of Commerce in Korea is the largest foreign chamber in Korea. We have almost 2,000 individual members and about 1,000 corporate members. And what we do is promote US/Korea trade and we try to act as a bridge between the US business community and the Korean public and private sector.
So, we try to help our members thrive in the Korean marketplace, but we also try to explain what Korea is like today to the US public and mostly government officials.
Tom:So, how did you come to your position as President of the Chamber in Korea and what are your impressions of the job now? Especially since you’ve been on the job now for seven months as I understand it.
Amy:That’s right. I spent a lot of time in the US government working on Korea issues. At the Office of the US Trade Representative, I led bilateral discussions and negotiations with Korea in the trade realm and the lead up to the launch of the Free Trade Agreement.
And that was an issue in many sectors; pharmaceuticals, autos, insurance, other financial services, education, different issues related to food. And I got very interested in the Korean market and very impressed with Korea and how dynamic its economy is, how forward-leaning Korea is.
So, when this job came open, I was really excited to be able to have the opportunity to come here and head the American Chamber.
Tom:What is it about Korea that you find most compelling, most interesting, most exciting. You mentioned it briefly, just the dynamic nature of the marketplace. What else drew you to Korea?
Amy:I spend a lot of time working with Japan and Korea and people always ask me to compare, and I think one of the most striking things is the ability of Korea to change. When Korean policymakers, or the Korean private sector, or even Korean citizens think something is in their best interest, they’re happy to move on a dime and embrace some new idea or go in a new direction. And it’s really evident here.
As I said, I started working with Korea in 2002 and have been back and forth to Seoul many times a year and coming to live here, I’ve seen so many changes. Cheonggyecheon is the beautiful park downtown where families can go and it was a major project of Lee Myung-bak’s when he was Mayor of Seoul.
You see all kinds of new construction here. You see new foreign businesses thriving here and you really feel it in the atmosphere I think. That’s one of the things that has struck me since I’ve actually come and lived here.
Tom:The chamber in Korea has a reputation as one of the best run Chambers of Commerce in Asia. Why do you think that’s the case?
Amy:I’m very glad that it has that reputation. That was my impression of the Chamber working with the Chamber when I was in the US government and that’s very much thanks to my predecessor, Tami Overby, who held this position for many years.
I think one of the major accomplishments of the Chamber over the last many years is the fact that it has been able to move from somewhat, if I can call it, cable pounding organization to a much more partner-focused organization and what that has done is that it’s opened a lot more doors to us.
So, we come and present issues and concerns and problems to our Korean counterparts both in the private sector and the public sector, but we try to do it in a cooperative, behind-the-scenes fashion and we have gotten a lot better results doing it that way; a lot more doors open to us. When we ask for meetings, we typically get them and we get a lot of consideration of our views from our Korean counterparts.
Tom:In your opinion, what are the top three things that the American Chamber of Commerce in Korea had achieved for American companies, say, over the last ten years or so?
Amy:Oh, I would say that is one of them — moving the organization from America cable pounding focused organization to one that has spent a lot more time building the bridges because we consider ourselves a bridge between the US business community and Korea.
And so, we’ve had a lot of success in, as I said, having a much more cooperative open door relationship, particularly with Korean government policymakers.
Another major triumph I think is the US-Korea Free Trade Agreement. Who would have thought five years ago that there would be a US-Korea Free Trade Agreement? Who would have thought that Korea would have a Free Trade Agreement with the United States before Japan?
AMCHAM was one of the key promoters of this FTA both in its initial stages before it was launched and all during the negotiations. And now, trying to get it passed, we still are really out in front of this FTA because we believe it’s in both countries’ interests and both countries’ business communities in interests.
Tom:Right. How about another achievement for American companies in Korea? Anything else?
Amy:Actually, at the end of 2008, after a long protracted lobbying effort, we — the American Chamber of Commerce — was very instrumental in getting Korea on the Visa Waiver Program. This has had both concrete economic effects for our travel and tourism member companies because there are so many more visitors now going from Korea to the United States.
But also, sort of for the halo effect of just underlying the positive relationship between the US and Korea in all realms, not just in the military or the political realm, also the economic realm and showing Korea that they are an important partner to the United States, from A to Z, I think it has a really positive effect on business here.
Tom:I’d say that’s the case. Let’s talk about our course a little bit more, the Free Trade Agreement. That, obviously, is probably the number one task for AMCHAM Korea over the next couple of years. I imagined that that would be the case, yes?
Tom:And so, why is this important? What impact is this going to have for business between Korea and the United States once this gets approved?
Amy:Well, I could go on and on, but I’ll try to be a little a bit succinct in my answer. We, the American Chamber of Commerce, but also many businesses and people in the United States and Korea view the Free Trade Agreement between the United States and Korea as a third pillar in our relationships.
So, we have a very strong political relationship, a very strong military geo-strategic relationship. We feel that this needs to be underlined with an equally strong economic pillar. Both countries have done economic analysis of the benefits of the FTA to their economies, and at a time when both countries are still working to come out of the global economic recession are very focused on jobs. This is an agreement that will bring jobs to both countries.
On the US side for example, the International Trade Commission estimated that there would be an immediate boost of $10-12 billion of US exports. Korea also has — and I don’t remember the figures off the top of my head for them — an immediate boost.
So, this will benefit industry across the board, help promote foreign direct investment in each other’s countries and further export from Korea to the US and the US to Korea.
Tom:So, which AMCHAM Korea member constituencies would you say stand to gain the most from the passage of KORUS?
Amy:I think the vast majority of my members will benefit from KORUS and that’s why the American Chamber is such a strong supporter of it. Not only do Free Trade Agreements cover tariff reduction — I mean, that’s a huge portion. Hundreds and hundreds of pages of the FTA’s dedicated to what tariff is going to come down to what level over what period of time. So, certainly, people who are selling goods can immediately benefit from this.
But, there are also chapters in the FTA that cover investor rights. So, anybody who’s an investor in Korea or any Korean company that’s an investor in the United States automatically gets better protection. Intellectual property rights is a big chapter in the Free Trade Agreement. And so, anybody who wants to protect intellectual property in the Korean market or vice versa in the US market will find very strong protections.
One of the key parts of the — I’ll call it the unsung hero of the FTA — is the regulatory transparency chapter. That is one of the key issues my members face in the Korean market. The fact that still — although we have made significant progress — still, too many rules and regulations are changed without enough involvement of stakeholders, without enough notice, without opportunities to comment.
The US-Korea Free Trade Agreement has a very expensive chapter that deals with that to a pretty significant degree of detail — how, when, in what cases, when regulations are changed. There needs to be a much more transparent process that does allow stakeholders to input. That will help anybody who’s working in this market whether they’d be an American company of another foreign company or a Korean company.
Tom:So, what is the Chamber doing to push this process forward and what can members and also non-members do to support the passage of KORUS?
Amy:AMCHAM does a door knock on Washington at least once a year. Since the Free Trade Agreement was negotiated, I think AMCHAM has averaged about three times a year visits to Washington to meet with senior policymakers in the Administration and also key members of the Congress to help personally.
I think AMCHAM member stories are the most compelling because we are the people who are working on the ground here. We see what the Korean economy is and is not like every day.
Unfortunately, I think a lot of American policymakers are ill-informed about what Korea is like today. Their image of Korea is back in the 1980s and the differences between Korean, the general way policy has made the way they embrace competition now, it’s such a stark contrast from now and 20 years ago that it’s really important that people who are on the ground here in Korea go to Washington and do this kind of advocacy.
So, we are about to head out. We’re going in mid-May and, again, we will be meeting with key policymakers in the Obama Administration and key members of Congress to talk about the importance of the FTA and importance of early passage of it.
Every time Congressional delegation comes to Korea or Congressional staff delegation comes to Korea, we meet with them, we sit down with them. We talk to them about, again, what’s it like on the ground here, where there been significant positive changes, where there are still issues and really strongly advocate for early passage of the Free Trade Agreement.
Tom:How do you expect the passage of the Free Trade Agreement to unfold and when do you think it’s going to take place?
Amy:Yeah, that’s a big question. For me, the best case scenario — I don’t think there’s any real possibility that the Obama Administration is going to take up this or any of the other pending free trade agreements before the mid-term elections in November.
My hope, and the best case scenario, would be as soon as those mid-term elections are over — remember, Obama will be coming here for the G-20 about a week later. He will be meeting with President Lee and I hope he comes with a very detailed plan of action that he can share with President Lee about the submitting the agreement to the Congress for consideration at the end of the year and an early vote. That’s my hope.
Tom:Certainly something, I’m sure, many people are going to be looking forward to. Other than lobbying for the Free Trade Agreement, you I’m sure have other major goals that the American Chamber is working toward right now. What are a couple of these other goals that you guys are focused on right now?
Amy:I think both Korea and the United States are very interested in and committing a lot of resources to green growth. And we have many companies here who are interested in exploring partnerships with Korean companies to develop new Green Growth technologies that can be sold in both of our countries, but also around the world.
And so, we have an energy and Green Growth committee that’s been very active. It’s already written up a position paper and presented it to Korean authorities. We are having active discussions with Korean government and private sector officials on areas in which our countries and companies can work together in the green growth areas, so I think that’s going to be a big area of focus for the rest of the year.
Also in the area of green growth, I think all countries around the world have to be careful that as they develop new green growth policies –we’re talking about recycling, packaging, labeling, those kinds of things that we don’t put in to place; new policies that could have ill-intentioned consequences.
So, for example, I understand that there was a new packaging law put into effect in Korea sometime ago for a certain type of product. It said, “You can only put two layers of packaging on it, not three,” and this is in order to save the environment.
But, what happened to certain American companies who are selling that product here, they had this reroute their product to Singapore, unwrap it, throw away the extra wrapper, rewrap it and send it to Korea which was a total waste for the environment because it cost extra fuel, extra money — you can imagine.
So, I think we, the American Chamber of Commerce, will be working really closely with our companies and with Korean authorities to make sure that as these policies are introduced that there’s enough stakeholder involvement so that we can make sure to avoid those kind of ill-intended consequences. So, we will be spending a lot of time on that.
One other area is the Korean biopharmaceutical sector is a sector in which the Korean government has designated it as a sector of growth for the Korean economy. This is an area in which we have a lot of interest and expertise. We have so many innovative pharmaceutical companies really cutting-edge biotechnology that’s coming out of the United States right now.
So, the American Chamber of Commerce is also going to be spending a lot of time working on forging new partnerships between our biopharmaceutical sector and the Korean biopharmaceutical sector, and we’re going to kick it off.
We’re about to announce that we’re having a big seminar on July 1st that will talk about promoting innovation in the Korean biopharmaceutical sector. We’ll be having lots of speakers coming from the United States and, hopefully, Europe. And we’re going to be partnering with Korean Authorities and the public and private sector and exploring ways in which we can cooperate and help Korea advance its goals of becoming a leader in biopharmaceuticals. So, that’s a few key areas of focus for this year.
Tom:Sounds terrific. Let’s talk about your members a little bit. I’m sure your members are a diverse lot and I know it’s probably hard to pin them down to simple categories, but if you were to break things down a little bit, can you tell us a bit about the types of companies and individuals who benefit from membership in AMCHAM?
Amy:One of the things I’ve been surprised about since I came here is that people who are not American don’t think they can be part of the American Chamber of Commerce. That’s totally wrong.
We have so many Koreans who work for American companies. More and more are beginning to participate in the Chamber and we welcome them, but we also have Korean companies. Our charter encourages membership from anyone who is involved in US-Korea Trade.
So, our membership runs the gamut of nationalities but it also runs the gamut of very large companies, manufacturing companies, small companies, service providers. It really is a diverse group. There’s no one segment that dominates over other segments.
Tom:So, beyond the advocacy of issues, such as the passage of Free Trade Agreement, what unique value offerings does the AMCHAM membership provide for those who become members?
Amy:I think the feedback that I get from the members is one of the things they really appreciate is the opportunity to network, so they can meet other companies that either do similar things that they do or have similar problems or similar issues that they’re facing.
Some of our members have been in country for a long time. Some of our members are Korean; very good to get advice from some of the Korean managers that some of the US business folks who are based here can meet with.
We also have about 30 active committees that are broken down by sector, but also sort of by theme. So, we have a Human Resources committee, we have a taxation committee, and we have a legal committee.
And those committees invite speakers or we have a human resources seminar that we do annually that we did about two weeks ago that a lot of our members like to go to because we try to pick themes of issues that are common across companies doing business in Korea, whether they’re American or Korean, and deal with them as difficult issues related to human resources.
Similarly, the taxation committee tries to deal with new tax policies that are coming up that might present some difficulties or confusion in trying to get the Korean authorities in charge of them to come speak to the committee and clarify issues or convey concerns about these new policies.
Those kinds of meetings cut across all sectors and can be important information for big companies or small companies, but we also have the thematic committees. We have aerospace and defense committee, we have a pharmaceutical medical devices committee, etc. So, for our members who are in a specific sector, they also have the resources that are provided in those committees.
What we try to do in the committees is have relevant speakers, deal with timely issues, but also if there are issues of concern, we — through our committees — submit papers to relevant Korean government officials to try seek change or try to seek clarification of new policies that are coming up that might be of concern; so very active.
We advertise for our companies. There are a lot of ways that companies can do that. We have a journal, we have a membership book. We meet frequently with individual members to talk about what their issues are and help give them some advice on experts in country to reach out to. That’s some of the list of what we do.
Tom:Certainly sounds pretty comprehensive. At what point does the US company become big enough that membership in AMCHAM actually makes sense and, further, can individuals join and participate or is it only for companies?
Amy:It’s absolutely not just for companies. We have a lot of company members, but we also have a lot of individual members. So, we welcome both and I think we try to run our meetings and our committees, and also provide certain benefits that will appeal to everyone, not just our larger corporate members.
Tom:So, can you maybe give us a couple of examples of maybe some small companies that are really thriving within AMCHAM and what are they doing that’s helping them get so much value from their membership?
Amy:It’s interesting you raised that point. When I got here, we, AMCHAM did not have a small what we called an SME — small-medium enterprise committee — and some of my members came to me soon after I got here and expressed a strong interest in launching ones.
So, we have launched our SME committee. We are hoping that that committee will provide specific schematic issues in their committee meetings and get specific speakers that will appeal more to a smaller company audience.
One of the things we do as a membership organization, we also try to promote the services of some of our smaller company members. Some of them are Human Resources experts, some of them are consulting firms. They have a lot of unique expertise that they can provide both to our US and other foreign company members, but also to our Korean company members. So, we really try to encourage that kind of networking, but also cross use of each other’s services within the Chamber.
Tom:Alright, that certainly sounds great. Let’s change the focus here a little bit and talk about the business climate in Korea. Korea has a reputation as one of the most difficult markets in the world for foreign companies in which to do business. Do you agree with that?
Amy:I think it used to be that way. I think it can still be very difficult to do business in Korea, but it doesn’t have to be. I think, in many areas, Korea is changing and addressing some of the concerns that the US and other foreign businesses have presented to them.
Again, the regulatory transparency; that issue, the idea that when rules and regulations change, policymakers who are changing them need to reach out to stakeholders and get input, and I think we’ve seen a significant change.
Some ministries here more regularly reach out to the business community, the foreign business community and seek input before they implement new policies. We’re seeing that. There are still some ministries that are behind and need a lot more work.
And so, if you’re an industry that relies on one of those ministries that still is somewhat closed, business can still be very difficult here, but I think in many other areas, there’s been a significant improvement.
And also, a commitment at the highest levels of this government to embrace competition in the marketplace, to adopt international standards. That’s one of the pledges that President Lee made when he came into office that was very well received by the US business community. The fact that President Lee said, “I want international standards. I want to get away from Korea unique standards.” And I think we’re seeing a change in that direction and that’s very helpful.
Tom:From where said, what are some of the other main challenges facing American companies in Korea?
Amy:Fierce competition; that’s for sure. Korean products continue to gain in visibility, popularity, quality. Korea is an economic powerhouse and it’s going to be really prominent on the international stage this year with Korea hosting the G-20, with how amazingly successful Korean athletes where in the recent Olympics now presently has offered to host the next Nuclear Summit here.
I think you’re going to see a lot more of Korea on the international from and I think you’re going to see a lot more competition from up and coming Korean companies.
Tom:Some people would say that doing business in Korea somewhere between the chaos of China and, let’s say, the orderliness of Japan. Do you think that’s a fair characterization? Why or why not?
Amy:I know the Japanese markets really well. I’m not as familiar with the Chinese market, but it sounds a pretty apt comparison to me.
Tom:Yeah. So, how would you compare the business climate in Korea with the business climate in some of these other Asian countries? Can you give us an assessment there?
Amy:Yeah, I think, again, Korea is an extremely dynamic economy. One of the only countries OECD countries that’s growing quickly after the global financial meltdown. So, you’re seeing such dynamic activity in the Korean economy and focus on new industries to promote, focus on encouraging tie-ups between Korean companies and foreign companies. You’re not necessarily seeing that kind of dynamism in some of the other Asian economies.
Tom:What are some of the other unique characteristics of the marketplace in Korea compared to some of these other Asian economies?
Amy:Well, earlier I talked about ability to change. That’s very meaningful that if you see you’re doing something that’s not getting you the results that you want. Korea is so much more adept at adapting quickly and embracing a different way of doing things or a different approach.
You don’t see that so much, for example, in Japan; the unfortunate incident with the Toyota vehicles and the recall, I think is a call to action for all multinational businesses. My sense here is that Korea’s really watching this case and learning now about what pitfalls to avoid because they have their major stake in the United States and other markets around the world and they don’t want to see this kind of thing happen to them in the future. So, really fast adaptability is one of the big differences here.
Tom:In our recent poll at Korea Business Central, 35% of respondents listed bureaucracy and non-tariff barriers as the biggest obstacles to foreign investment in Korea. I think we touched upon these issues briefly earlier. Would you agree that these are the top two issues that foreign companies are facing in Korea today?
Amy:I would add one more and that would be labor. On the positive side, the Korean workers are known to be among the most productive, dedicated, well-educated workers in the world. So, that is very attractive to foreign investors.
But, on the other hand, some of the violent strikes that happen here, for those of us who live here, understand that they are not the norm. They’re still well-publicized around the world.
When I was in Washington, that was front page a year or so ago and that leaves a bad impression for possible investors, but also the fact that labor so inflexible here. It’s so difficult to hire and fire based on the success or lack of success of your company. That’s a big hurdle for doing business here.
Tom:So, when it comes to these hurdles, how is the Chamber getting involved in terms of lobbying the Korean government to improve some of these issues?
Amy:We talk about it all the time with everyone who will listen.
Tom:I’m sure you do.
Tom:So, can you give specifics though on your work with the Korean government to address these things?
Amy:Yeah. For non-tariff barriers, again, one of the key non-tariff barriers is regulatory transparency. So, we try at every opportunity when we hear of a rule or regulation that is being introduced that could inadvertently hurt trade.
There have actually been some new rules that have been proposed that would cut off trade entirely in a certain industry or sector between the United States and Korea. Whenever we hear about those, we immediately go into Korean authorities and talk about what the issues are and how the proposed rule or regulation can be changed to still achieve the goals that the Korean government are trying to achieve, but without the disruptive elements of trade.
There are other kinds of non-tariff barriers and, again, those are high on our agenda to try to work with Korean authorities to make sure that those do not impede trade. Those are not even introduced if we can get them in an early enough stage. So, we spend a lot of time both me, personally, but also my staff every day working on those kinds of issues.
Tom:Can you talk a little bit about the way you impact and influence the Korean decision making process with the government there? Can you talk about your influence? How do you go about it and do you feel like you’re effective? Why or why not?
Amy:One of the unique things under the Lee Administration is there is a Presidential Council on national competitiveness. It has been in existence under various names for leaders before President Lee, but President Lee is the first one to invest his own personal time in it.
So, this council meets, basically, monthly and looks at issues of competitiveness in the Korean economy. So, every month they have a couple of different issues they talked about — deregulation of financial services sector; you name it.
AMCHAM has been asked to participate in that as a member of this council. So, this is a very important opportunity for us at the very highest levels to provide our views and opinions on some of the key issues that Korean policymakers are dealing with.
So, we have access right at the top which is a really unique feature of Korea. I don’t think many of my counterparts around the world have that kind of access to leadership, but also a really important opportunity to interface at the highest levels on issues of concern.
But, we also have general membership meetings at least monthly and we try to get leading speakers from the US government and the Korean government and the private sector. We recently had the Minister of Knowledge Economy. We have asked the Prime Minister to come speak to our membership. So, that’s also another opportunity to talk to key policymakers about issues. But, as you know, working with Korea you can’t just do top-down, you have to do bottom-up as well.
So, at our committee meetings, we very frequently invite Korean policymakers at the Director, the Deputy Director, Director General level to come in and talk to us about things that are coming down the pike or things that are developing new policies so we can ask our questions where there are things that are unclear and we can provide comments.
But, we also work, as I said, regulatory transparency — I feel like I’m the queen of transparency — but we really push hard when we hear new policies are being developed. We push the bureaucracies really hard to put these things out for public comment which is the practice around the world. And when they do put it out for public comment, we work with our committees to provide public comments. So, AMCHAM frequently comments on proposed rules and regulations.
Tom:Well, that’s great. It sounds like you guys are doing a lot of terrific work and good for you. I’m sure the members certainly appreciate everything that you, and your staff, and your colleagues are doing.
To conclude, our visit today as the head of the leading US business organization in Korea, I’m sure you’ve learned quite a bit about doing business in Korea. In a nutshell, what are three practical recommendations about business in Korea that you would like our listeners to take away from our conversation?
Amy:I think joining in the American Chamber of Commerce is a really good idea because we do provide a lot of infrastructure, knowledge, and networking opportunities to help businesses succeed here.
You mentioned earlier that some of your — I don’t remember whether you said it was a poll or not, but that some of your members have talked about Korea being one of the hardest places to do business.
If you’re coming in cold with an American mentality, it can be very difficult to do business here. So, you need to reach out to expertise. You need to reach out to organizations like mine. You need to reach out to business people who have done business here for many years who can give you pointers.
But, they’re also all kinds of support services you can get here whether it be through legal consultants, human resources people, etc. who can give really good advice about how to do business here. So, my strongest piece of advice is do your homework and reach out to the people who can help you succeed here.
Tom:Certainly sounds like great advice. Anything else you’d like to share in closing?
Amy:Oh, no. It was really a pleasure to talk to you.
Tom:Yeah, great job, Amy. It was a pleasure as well for me and I’m sure it will be for our listeners to hear your thoughts as well. We’ve been visiting today with Amy Jackson, the President of the American Chamber of Commerce in Korea.
Amy, thanks a lot for the visit today and we’ll certainly look forward to touching base with you in the future. I wish you great luck and success in all that great work that you’re doing there.
Amy:Thank you very much.
Tom:Okay. Thanks, Amy. Take care.